The Agrarian Programme of Social-Democracy in the First Russian Revolution, 1905-1907

Chapter III

The Theoretical Basis of Nationalisation and of
    Municipalisation

Agrave fault of almost the whole Social-Democratic press
on the question of the agrarian programme in general, and a shortcoming of
the debate at the Stockholm Congress in particular, is that practical
considerations prevail over theoretical, and political considerations over

			      economic.[1]Most of us, of course, have an excuse, namely, the conditions of intensive
Party work under which we discussed the agrarian problem in the revolution:
first, after January 9, 1905, a few months before the outbreak (the spring
“Third Congress of the R.S.D.L.P.” of Bolsheviks in London in
1905 and the Conference of the Minority held at the same time in Geneva),
and then on the day after the December

uprising,[5]and in Stockholm on the eve of the First Duma. But at all
events this shortcoming must, be corrected now, and an examination of the
theoretical aspect of the question of nationalisation and municipalisation
is particularly necessary.

1. What is Nationalisation of the Land?

Abovewe quoted the current formulation of the now
generally recognised proposition, “All the Narodnik groups are
advocating nationalisation of the land.” As a matter of fact, this
current formulation is very inexact and there is very little in it that is
“generally recognised”, if by this we mean a really identical
conception of this “nationalisation” among the representatives
of the various political trends. The mass of the peasantry demand the land
spontaneously, for they are oppressed by the feudal latifundia. and do not
associate the transfer of the land to the people with any at all definite
economic ideas. Among the peasantry there is only a very urgent demand,
born, so to speak, from suffering:.and hardened by long years of
oppression—a demand for the revival, strengthening, consolidation,
and expansion of small farming; a demand that the latter be made
predominant, and nothing more. All that the peasant visualises is the
passing of the landlord latifundia into his own hands; in this struggle the
peasant clothes his hazy idea of the unity of all peasants, as a mass, in
the phrase: ownership of the land by the people. The peasant is guided by
the instinct of the property owner, who is hindered by the endless
fragmentation of the present forms of medieval landownership and by the
impossibility of organising the cultivation of the soil in a manner that
fully corresponds to “property owning” requirements if all this
motley medieval system of landownership continues. The economic necessity
of abolishing landlordism,

ofabolishing also the “fetters” of allotment
landownership—such

are thenegativeconcepts which exhaust thepeasantidea
of nationalisation. What forms of landownership may eventually be necessary
for renovated small farming, which will have digested, so to speak, the
landlord latifundia, the peasant does not think about.

Thenegative aspects of the concept (or hazy idea) of nationalisation
undoubtedly also predominate in Narodnik ideology, which expresses the demands
and the hopes of the peasantry. The removal of the old obstacles, the clearing
out of the landlord, the “unfencing” of the land, the removal of the
fetters of allotment ownership, thestrengthening of small farming, the substitution of “equality,
fraternity, and liberty” for “inequality” (i. e., the
land lord latifundia) —that expresses nine-tenths of Narodnik
ideology. Equal right to land, equalised laud tenure,
socialisation—all these are merely different forms of expression of
the same ideas; and all are mainly negative concepts, for the Narodnik
cannot conceive the new order as a definite system of social-economic
relationships. The Narodnik regards the present agrarian revolution as a
transition from serfdom, inequality, and oppression in general, to equality
and liberty, and nothing more. That is the typical narrow-mindedness of the
bourgeois revolutionary who fails to see the capitalist features of the new
society he is creating.

Incontrast to the naïve outlook of Narodism, Marxism investigates
the new system that is arising. Even with the fullest freedom of peasant
farming and with the fullest equality of small proprietors occupying the
peoples, or no man’s, or “God’s” land—we have before us a
system of commodity production. Small producers are tied and subjected to
the market. Out of the exchange of products arises the power of money; the
conversion of agricultural produce into money is followed by the conversion
of labour-power into money. Commodity production becomes capitalist
production. And this theory is not a dogma, but a simple description, a
generalisation of what is taking place in Russian peasant farming too. The
freer that farming is from land congestion, landlord oppression, the
pressure of medieval relations and system of landownership, bondage, and
tyranny, tile more strongly do capitalist relationships develop within that
peasant farming. That is a fact to which the whole of the post-Reform
history of Russia undoubtedly testifies.

Consequently,the concept of nationalisation of the land, in terms ofeconomic reality, is a category of commodity and capitalist
society. What is real in this concept is not what the peasants think, or what
the Narodniks say, but what arises from the economic relations of present
society. Nationalisation of the land under capitalist relations is neither more
nor less than the transfer of rent to the state. What is rent in capitalist
society? It is not income from theland in general. It is that part of surplus value which re— mains
after average profit on capital is deducted. Hence, rent presupposes
wage-labour in agriculture, the transformation of the cultivator into a
capitalist farmer, into an entrepreneur. Nationalisation (in its pure form)
assumes that the state receives rent from the agricultural entrepreneur who
pays wages to wage-workers and receives average profit on his
capital—average for all enterprises, agricultural and
non-agricultural, in the given country or group of countries.

Thus,the theoretical concept of nationalisation is inseparably bound
up with the theory of rent, i. e., capitalist rent, as the special form of
income of a special class (the landowning class) in capitalist society.

Marx’stheory distinguishes two forms of rent: differential rent
and absolute rent. The first springs from the limited nature of land, its
occupation by capitalist economies, quite irrespective of whether private
ownership of land exists, or what the form of landownership is. Between the
individual farms there are inevitable differences arising out of
differences in soil fertility, location in regard to markets, and the
productivity of additional investments of capital in the land. Briefly,
those differences may be summed up (without, however, forgetting that they
spring from different causes) as the differences between better and worse
soils. To proceed. The price of production of the agricultural product is
determined by the conditions of production not on the average soil, but on
the worst soil, because the, produce from the best soil alone is
insufficient to meet the demand. The difference between the individual
price of production and the highest price of production is differential
rent. (We remind the reader that by price of production Marx means the
capital expended on the production of the product, plus average profit on
capital.)

Differentialrent inevitably arises in capitalist agriculture even if
the private ownership of land is completely abolished. Under the private
ownership of land, this rent is appropriated by the landowner, for
competition between capitals compels the tenant farmer to be satisfied with
the average profit on capital. When the private ownership of land is
abolished, that rent will go to the state.Thatrentcannotbe abolished as long as the capitalist
mode of production exists.

Absoluterent arises from the private ownership of land. That rent contains an
element of monopoly, an element of monopoly

				price.[2]Private ownership of land hinders free competition, hinders the levelling
of profit, the formation of average profit in agricultural and
non-agricultural enterprises. And as agriculture is on a lower technical
level than industry, as the composition of capital is marked by a larger
proportion of variable capital than of constant capital,the individual
valueof the agricultural product is above the average. Hence, by
hindering the free levelling of profits in agricultural enterprises on a
par with non-agricultural enterprises, the private ownership of land makes
it possible to sell the agricultural product not at the highest price of
production, but at the still higher individual value of the product (for
the price of production is determined by the average profit on capital,
while absolute rent prevents the formation of this “average” by
monopolistically fixing the individual value at a level higher than the
average).

Thus,differential rent is inevitably an inherent feature of every form of
capitalist agriculture. Absolute rent is not; it arises only under the private
ownership of land, only under the

			    historically[3]created backwardness of agriculture, a backwardness that becomes fixed by
monopoly.

Kautskycompares these two forms of rent, particularly in their bearing
on the nationalisation of the land, in the following propositions:

“Asdifferential rent, ground rent arises from competition. As
   absolute rent, it arises from monopoly.... In practice, ground rent does
   not present itself to us divided in parts; it is impossible to say which
   part is differential rent and which part is absolute rent. More over, it is
   usually mixed with the interest on capital expended by the landowner. Where
   the landowner is also the farmer, ground rent appears as a part of
   agricultural profit.“Nevertheless,the distinction between the two forms of rent is
   extremely important.“Differentialrent arises from the capitalist character of
   production and not from the private ownership of land.“Thatrent would continue to exist even under nationalisation of the
   land, as demanded [in Germany] by the advocates of land reform, who would
   nevertheless preserve the capitalist mode of agriculture. In that case,
   however, rent would no longer accrue to private persons, but to the state.“Absoluterent arises out of the private ownership of land,
   out. of the antagonism of interests between the landowner and the rest. of
   society.The nationalisation of the land would make possible the
   abolition of that rent and the reduction of the price of agricultural
   produce-by an amount equal to that rent. [Our italics.]“Toproceed: the second distinction between differential rent and
   absolute rent is that the former is not a constituent part affecting the
   price of agricultural produce, whereas the latter is. The former arises
   from the price of production; the latter arises from the excess of market
   price over price of production. The former arises from the surplus,, from
   the super-profit, that is created by the more productive labour on better
   soil, or on a better located plot. The latter does not arise from the
   additional income of certain forms of agricultural labour; it is possible
   only as adeductionfrom the available quantity of values for the
   benefit of the landowner, a deduction from the mass of surplus
   value—therefore, it implies either a reduction of profits or a
   deduction from wages. If the price of foodstuffs rises, and wages rise
   also, the profit on capital diminishes. If the price of foodstuffs rises
   without an increase in wages, then the workers suffer the loss. Finally,
   the following may happen— and this may be regarded as the general
   rule—the loss caused by absolute rent. is borne jointly by the
   workers and the

			    capitalists.”[4]

“Asdifferential rent, ground rent arises from competition. As
   absolute rent, it arises from monopoly.... In practice, ground rent does
   not present itself to us divided in parts; it is impossible to say which
   part is differential rent and which part is absolute rent. More over, it is
   usually mixed with the interest on capital expended by the landowner. Where
   the landowner is also the farmer, ground rent appears as a part of
   agricultural profit.

“Nevertheless,the distinction between the two forms of rent is
   extremely important.

“Differentialrent arises from the capitalist character of
   production and not from the private ownership of land.

“Thatrent would continue to exist even under nationalisation of the
   land, as demanded [in Germany] by the advocates of land reform, who would
   nevertheless preserve the capitalist mode of agriculture. In that case,
   however, rent would no longer accrue to private persons, but to the state.

“Absoluterent arises out of the private ownership of land,
   out. of the antagonism of interests between the landowner and the rest. of
   society.The nationalisation of the land would make possible the
   abolition of that rent and the reduction of the price of agricultural
   produce-by an amount equal to that rent. [Our italics.]

“Toproceed: the second distinction between differential rent and
   absolute rent is that the former is not a constituent part affecting the
   price of agricultural produce, whereas the latter is. The former arises
   from the price of production; the latter arises from the excess of market
   price over price of production. The former arises from the surplus,, from
   the super-profit, that is created by the more productive labour on better
   soil, or on a better located plot. The latter does not arise from the
   additional income of certain forms of agricultural labour; it is possible
   only as adeductionfrom the available quantity of values for the
   benefit of the landowner, a deduction from the mass of surplus
   value—therefore, it implies either a reduction of profits or a
   deduction from wages. If the price of foodstuffs rises, and wages rise
   also, the profit on capital diminishes. If the price of foodstuffs rises
   without an increase in wages, then the workers suffer the loss. Finally,
   the following may happen— and this may be regarded as the general
   rule—the loss caused by absolute rent. is borne jointly by the
   workers and the

			    capitalists.”[4]

Thus,the question of the nationalisation of the land in capitalist society
falls into two essentially distinct parts:

the question of differential rent, and that of absolute
rent. Nationalisation changes the owner of the former, and undermines the
very existence of the latter. Hence, on theone hand, nationalisation is a partial reform within the limits of
capitalism (a change of owners of a part of surplus value), and, on the
other hand, it abolishes the monopoly which hinders the development of
capitalism as a whole.

Unlessa distinction is made between these two sides, i. e., the nationalisation
of differential rent and of absolute rent, it is impossible to understand the
economic significance of the question of nationalisation in Russia. This brings
us, however, to P. Maslov’s repudiation of the theory of absolute rent.

[1]Inmy pamphletRevision of the Agrarian Programme of the
Workers’ Party, which I defended at Stockholm, there are very
definite (although brief, as the pamphlet itself is) references to thetheoreticalpremises of a Marxist agrarian programme. I pointed
out in that pamphlet that “the bare repudiation of nationalisation” would
be a “theoretical distortion of Marxism” (p. 16 of the old edition, p. 41
of this edition). (See present edition, Vol. 10, p. 181.—Ed.)
See also my Report on the Stockholm Congress, pp. 27-28 of the old edition
(p. 63 of this edition). (See present edition, Vol. 10,
p. 346.—Ed.)  “From the strictly scientific point of view, from
the point of view of the conditions of development of capitalism in
general, we. must undoubtedly say—if we do not want to differ from Volume
III ofCapital—thatthe nationalisation of the land is possible
in bourgeois society, that it promotes economic development, facilitates
competition and the influx of capital into agriculture, reduces the price
of grain, etc.” See also the same report, p. 52 (see present edition,
Vol. 10, p. 378. —Ed.): “In spite of their promises, they [the
Right wing of Social-Democracy] do not carry the bourgeois-democratic
revolution in agriculture to its ‘logical’ conclusion, for the only
‘logical’ (and economic) conclusion under capitalism is the
nationalisation of the land, which abolishes absolute rent.”  —Lenin

[2]InPart 2 of Volume II ofTheories of Surplus Value, Marx
reveals the “essence of different theories of rent”: the theory of the
monopoly price of agricultural produce and the theory of differential
rent. He shows what is true in both those theories,insofaras
absolute rent contains an element of monopoly. See p. 125 concerning Adam
Smith’s theory: “it is quite true” that rent is monopoly price,
insofar as the private ownership of land prevents the levelling of
profit. by fixing profit at a level higher than the

average.[6]—Lenin

[3]SeeTheories of Surplus Value, Vol. II, Part I (German
original), p. 259: “In agriculture, manual labour still predominates, while
the capitalist mode of production develops industry more quickly than
agriculture. However, that is ahistoricaldistinction which may
disappear.” (See also p. 275, and Vol. II, Part 2,

p. 15.)[7]—Lenin

[4]K.Kautsky,The Agrarian Question, German original, pp.
   79-80.  —Lenin

[5]Leninis referring to the discussion of the agrarian question at the
First Conference of the R.S.D.L.P. held in Tammerfors December 12-17
(25-30), 1905. The report on this question was made by Lenin. In
furtherance of the decision of the Third Congress of the Party, the
Conference found it necessary to include in the programme an item calling
for support of the peasants’ revolutionary measures, including confiscation
of all state, church, monastery, crown, and privately owned lands. The
Conference drew special attention to the need for an independent
organisation of the rural proletariat and for showing the latter that its
interests could not be reconciled with those of the rural
bourgeoisie.

[6]KarlMarx,Theorien über den Mehrwert, 2. Teil, Berlin,
Dietz Verlag, 1959, S. 336.

[7]Ibid.,SS. 84,96,236.